Consider the following simplified financial statements for Turnbull Inc. - assuming no income taxes. The company has predicted a sales increase of 15 percent. Assume that Turnbull Inc. pays out half of its net income in the form of a cash dividend. Cost and assets vary.with sales, but debt and equity do not. Balance Sheet Assets Liabilities $ 25,300 Debt Equity $25,300 Total $ 5,800 $ 19,500 $ 25,300 Assets Total Income Statement Sales $ 32,000 Costs 24,400 Net Income $ 7,600 Sales Increase 15% Payout rate 50% 1. Prepare the Pro Forma Statements for Turnbull Inc. 2. Determine the EFN
Consider the following simplified financial statements for Turnbull Inc. - assuming no income taxes. The company has predicted a sales increase of 15 percent. Assume that Turnbull Inc. pays out half of its net income in the form of a cash dividend. Cost and assets vary.with sales, but debt and equity do not. Balance Sheet Assets Liabilities $ 25,300 Debt Equity $25,300 Total $ 5,800 $ 19,500 $ 25,300 Assets Total Income Statement Sales $ 32,000 Costs 24,400 Net Income $ 7,600 Sales Increase 15% Payout rate 50% 1. Prepare the Pro Forma Statements for Turnbull Inc. 2. Determine the EFN
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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
Transcribed Image Text:Part C: Pro Forma Statements and EFN
Consider the following simplified financial statements for Turnbull Inc. assuming no income taxes.
The company has predicted a sales increase of 15 percent. Assume that Turnbull Inc. pays out half of its
net income in the form of a cash dividend. Cost and assets vary.with sales, but debt and equity do not.
Balance Sheet
Assets
Liabilities
$ 25,300 Debt
Equity
$ 25,300 Total
$ 5,800
$ 19,500
$ 25,300
Assets
Total
Income Statement
$ 32,000
24,400
$ 7,600
Sales
Costs
Net Income
Sales Increase
15%
Payout rate
50%
1. Prepare the Pro Forma Statements for Turnbull Inc.
2. Determine the EFN
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